PROPERTIES in the upmarket residential areas have breached the $5 billion mark with estate agents quoting prices ranging from $1-$6 billion for properties in Belvedere, Borrowdale, Golden Tri
angle, Glen Lorne and Chisipite.
Diasporans have been accused of fuelling the prices of properties with too much foreign currency (converted to Zim dollars) chasing too few properties.
“The recent introduction of a 10% withholding tax on the stock exchange will undoubtedly increase interest in property investments,” a stockbroker indicated.
A property manager with an insurance firm said it should benoted that the interest in property markets is being driven by the inflation hedging nature of real estate.
“With inflation at 255% and continuously increasing, investors are looking for an investment haven that can give them real returns,” he said.
“The property market just does that as long as you have the money. Future rentals of real estate are expected to increase in relation with inflation, consequently raising values.”
“Many individual investors have considered real property to be an ideal place to park surplus funds in order to preserve the purchasing power of their savings,” a real estate agent said.
“Institutional investors, especially insurance companies, facing the problem of inflated liabilities, have the same objective of preserving the purchasing power of their clients money.”
A developer said the property market is more stable than the share or bond market.
“Investors are not likely to panic and rush to sell their property as equity investors are doing on the ZSE. With the right choice, a property can provide solid capital growth. The investor has more control over property than shares and can add value to the asset by renovating or rebuilding,” the developer said.
One developer said that for a successful investment, you must acquire the right property in the right location at the keenest possible price and with its long-term viability in mind – in terms of both capital growth and letting potential.
“Location is paramount,” the developer said.
“Check for proximity to transport facilities, schools, shopping centres, sports and entertainment facilities and areas of future job growth. Property located in a safe, clean and attractive environment will have an already established high rental demand.”
Added the developer: “A well-kept, appealing property in good condition and in the right area should not be vacant for long periods.”